Doctors and Deadbeats

Earlier this year we learned how Miami-Dade's taxpayer-funded Public Health Trust incurred a $2.6 million loss after breaking its own rules. An uninsured patient from Guatemala was admitted for treatment at Jackson Memorial Hospital's well-regarded burn center. He subsequently died and the bill for his treatment was never paid. Ira Clark, who was then president of the Public Health Trust (PHT), assured the public it was a unique situation. This week PHT board members learned something new: The situation was far from unique.

Two audits reveal that the hospital is owed tens of millions of dollars from nonresident patients, many of whom should not have been admitted, according to the hospital's own policies. An internal audit by the PHT discovered $25 million in unpaid bills from nonresident patients. Meanwhile the county's Office of the Inspector General (full disclosure: I worked there as an agent in 2001) has produced its own audit of money owed the PHT by patients living outside Miami-Dade County. Its reckoning of unpaid bills came in at a staggering $85.6 million -- and that covered the relatively short period from January 1999 to April 2003. The PHT audit does not specify what years were examined.

The Public Health Trust operates Jackson Memorial Hospital and uses a dedicated half-penny sales tax (approved by voters in 1991) to assure that poor and uninsured Miami-Dade County residents receive professional medical care. The trust closed its most recent fiscal year with a $21 million deficit. Because of this, the county cannot afford to provide free treatment to nonresidents.

"We were misled by prior management," says PHT board member and former chairman Michael Kosnitzky, who has been pushing for reforms and fiscal transparency in the behemoth agency, which has a $1.3 billion annual budget. "Management said there were no other instances of this, that it was an isolated incident. In point of fact this was not an isolated incident."

The PHT's audit, disclosed this past Tuesday at a meeting of the trust's fiscal affairs committee, was prompted by the Inspector General's investigation into the case of the burn victim from Guatemala. Andy Murai, head of the fiscal affairs committee, says the case spurred him to order the report. "I felt it was my fiduciary duty," Murai says. "I feel that the previous management should have been more candid with us as to other cases that could be similar."

The audit found, among other things, that hospital officials "frequently violated" rules for admitting uninsured patients, employed deficient procedures for estimating how much deposit is needed for "self-pay" patients, and had "ineffective" collection efforts. "Historically 95 percent of the $25 million in receivables from nonresident self-pay accounts are written off," the audit states.

After exposing the $2.6 million burn-victim loss, the Office of the Inspector General (OIG) also decided a broader audit was in order. That report has not yet been released publicly. "There is a draft report that we issued on October 31 relative to nonresident, nonemergency patients. We're still reviewing [the PHT response to the audit] before issuing the final report," Inspector General Christopher Mazzella confirms, adding that PHT officials asked for extensions of time to prepare a response. Mazzella declined to release the report on Tuesday.

Some observers believe the PHT was attempting a form of damage control by releasing its internal audit before the more severe OIG report could be made public. PHT officials say the timing is coincidence. Marvin O' Quinn, who replaced Ira Clark six months ago as PHT president, says the OIG audit "found roughly the same issues" as their own.

I obtained a copy of that OIG report, which has been circulating at Jackson for two months. In it OIG auditors found $85 million in unpaid bills, but concentrated on the most egregious 68 cases, which accounted for $16.3 million of the total. It is far more detailed than the PHT audit regarding the history and types of cases that have gone unpaid.

The OIG grouped the incidents into three categories: free services, in which doctors treated foreign patients knowing they could not pay; referrals from the University of Miami's International Health Center, which screened patients and sent them to Jackson ostensibly after determining that the patient could pay for treatment; and "other self-pay" -- uninsured foreign patients who were required to deposit money before treatment but did not.

Examples include a Peruvian patient, reportedly insured, who received two years' worth of treatment totaling $1.16 million. The cost exceeded his insurance limits and the patient "reverted to self-pay status," but never paid. Another case involved a Saudi national who was admitted with a letter guaranteeing payment from the Saudi Arabian government, but died owing $233,500, which has not been paid. Four patients from Aruba, all using the same insurance company, collectively owe $930,909 for treatments dating from 2001. There's even a patient from Indiana who received an organ transplant and ongoing care for two and a half years and who owes one million dollars, for which Indiana Medicaid is responsible.

O'Quinn says some of the bills uncovered by the PHT audit came from patients admitted to the emergency room who could not legally be turned away. Other problems occur when foreign patients are admitted after being screened abroad, only to have Jackson's doctors discover that the patient's condition is more complicated than they'd expected. But he admitted the hospital would now "tighten up the process of how we recruit international patients." He added that Jackson is seeking to collect the outstanding debts.

Murai notes that his committee has already approved a couple of measures to avert future losses. They include having PHT employees assume management of the International Health Center, which screens foreign patients and has been run by University of Miami officials. Thirty of the patients in the OIG draft report had their accounts managed by the International Health Center.

The committee also endorsed hiring two international collection agencies to "go after this money very aggressively," Murai says, adding that after the case of the foreign burn victim, the PHT tightened up loopholes that allowed the president alone to waive the rules for admitting uninsured foreign patients. Now the president and the PHT chairman both must sign such waivers. "There are new policies that have been put in place over the last four or five months that should prevent this from happening in the future," Murai says. "We can't waste one more day. We owe this to the people of Miami-Dade County."